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Housing Outlook is edited by Gavin Cameron, John Muellbauer and Anthony Murphy. Go to our Home page to see what else is new. UK Market Outlook - March 2006This Version: 13 March 2006 |
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The latest data from the Halifax estimate that house prices rose by 1.4% in February with year on year growth of 5.5%. The Nationwide data show a small fall of 0.2%in February with a 3.7% annual rise. Hometrack reported a monthly rise of 0.4% in February. The Land Registry data show a 4.6% rise in the year to December 2005. Interestingly, London appears to now be resuming its traditional role as the leader of the housing market, perhaps driven by the strong performance of the City in the past year. See our chart of UK trends. There is no doubt that the British housing market has slowed considerably since last Summer. Nonetheless, prices are still almost double their level at the turn of the millennium and are some way past their 1989 peak relative to incomes (even when one looks at only the incomes of those households that have someone in work). Our latest research (Was There a British House Price Bubble?) suggests that fears of a housing market collapse may have been overstated. The market continues to be supported by historically low interest rates, low rates of housebuilding, steady income growth, and positive demographics. In our modelling, even very large (by recent standards) macroeconomic shocks fail to create a significant downturn in the market. See our historical background article for a longer run perspective. GFC Last updated: 13 March 2006. General Enquiries| Press Enquiries | |